Chen Lin: Welcome to this special interview; we have a special situation here this week. China imposed export controls to the rest of the world on two critical metals that China controls about 80 to 90% of worldwide production. Those are very, very critical and aim to strike at the heart of the semiconductor industry in the United States and beyond. I’ve gotten a lot of questions from my subscribers and I understand from First Tellurium that they also are getting a lot of questions, so let's get started. It's my great pleasure to introduce First Tellurium Corp. (FTEL:CSE; FSTTF:OTCQB) CEO Tyrone Docherty, who happens to be the largest shareholder and he has been running the company since the very beginning. Hi and welcome.
Tyrone Docherty: Thank you, Chen. It's always a pleasure to talk about First Tellurium.
CL: Can you tell us what is tellurium? A lot of people don't know it and don't know how to spell it. Can you tell us what is tellurium, who makes tellurium, and what is tellurium’s use?
TD: Well, it's a critical metal; it's the eighth or ninth rarest metal in the world, and it's used primarily of late in solar panels, cadmium-tellurium solar panels, which are the specialty of First Solar, the large U.S. corporation that has about 40% of the [solar panel] market, 30% of the market in thermoelectrics, and then there are some other markets. What has got us attention as well lately is that the University of British Columbia has patented a new lithium-tellurium battery, which is supposedly far superior to a lithium-ion battery, so if and when that comes to market it will make the demand even greater for a mineral that is in scarce supply as we speak.
CL: Tyrone, who makes most of the tellurium in the world? We kind of know the concept but maybe you can elaborate.
TD: Well, like all the critical metals, most of it comes from China. As a matter of fact, they're responsible for about 60% of the tellurium supplied in the world. That's one of the reasons why about 18 months ago the U.S. government was hoping to get other countries with properties with tellurium to get them going because they're going to need that supply because there was always a risk that the U.S. government would stop the importing of tellurium. Now with what's happened recently with the Chinese deciding that they weren't going to export it, it's a bit of a Mexican battle if you will, and we're really good in the fact that we're the only junior in the world that's been looking for tellurium for the last few years, so we're well ahead of the curve.
CL: Excellent. Just let me make people understand a little bit better. So, First Solar in the United States, the largest solar panel producer, is directly in competition with Chinese solar panels producers, and they use a lot of tellurium, the biggest tellurium user in the world. So, if China were to restrict tellurium exports, that would strike at the heart of the solar panel industry to the benefit of the Chinese solar panel industry.
TD: That's correct and that's why I think starting in 2006-07, First Solar had a worldwide expedition looking for potential suppliers down the road of tellurium and then they decided that they would get out of the mining business and just buy tellurium off the market, so we positioned ourselves by taking the property that used to belong to them in Colorado, which is superb, and our own high-grade property here in British Columbia – it's also mixed up with high grade gold and silver, so we’ve got the best of both worlds: great precious metals and this wonderful mineral tellurium. We're sitting very, very good compared to anyone else.
CL: So, basically let me understand. You took over the best tellurium claim that used to be owned by First Solar when they got out of the mining business, you took it, right, so that you own the best claim of tellurium in the world.
TD: Yes, but to put things in perspective, Chen, is that in North America alone they [First Solar] looked at over 100 properties that had tellurium in it and their number one property by far was this Klondike property in Colorado, which we now control. And the reason we control it is that when they got out of the mining business, they sold the property to their head of exploration who formed the company with his family and friends and then approached us a few years ago to see if we'd be interested. Two-and-a-half years ago we finally came to an agreement and now we have that under our control. We plan on exploring it and developing it, and the results are on another planet compared to what we have in Canada. We're high-grading Canada.
CL: Excellent. I understand in the United States, in Toledo, Ohio, they have a consortium funded by the U.S government. Can you tell us more about that?
TD: The U.S. government gave them, I think, $20 million about a year ago to help with the advancement of tellurium, looking for other properties and other potential suppliers, mainly domestic and, of course, from friendly countries such as Canada. So, they've been working together with First Solar who's been the main beneficiary but there's a number of scientists working to figure out where we can get tellurium that isn't reliant on China. So, we're very fortunate in that situation.
CL: You seem to be the go-to guy in terms of tellurium. Are you approached by any governments to work out certain deals?
TD: Well, I don't know if they're considered government or certain government entities or people behind them, which I can't really get into because unless we sign something that is binding, then I'd have to report it. So, all I can say is that obviously if you're the only company that has tellurium and people understand how valuable it is going to be in the future, people with money and with foresight will want to get involved with a company that has these types of properties available to them. Just like if you could imagine someone who's looking for cobalt, there's probably two or three dozen cobalt companies out there and two or three dozen graphite companies, probably they would get an interest. We're the only tellurium company and that's why I joke we should call ourselves “First and Only Tellurium,” but because we have these two phenomenal properties of a critical metal that no one else has, it shouldn't be unexpected that people with money knock on the door and say, "Hey, would you like to talk to us about the future?" So, my attitude's always been, Chen, is that we know we're going to drill it up this summer, increase the size of the reserve that we know we have, and then we're in a bigger position to say, "Okay now we have more ounces of gold and silver, more kilos of tellurium, now let's figure out where the bidding starts or we just keep drilling more next year because we know we're going to increase it as well." So, we're in a very good situation. We're not hurting for money. I've made a little bit of money in my last deal, so if there's any emergency funds needed, I throw it in and away we go.
CL: You have been in on almost every financing so far that the company has done.
TD: I think between my wife and I we own between 13% and 14% of the company not including the warrants. If you include the warrants, I think we'd be somewhere around 21, 22, 23%, so I don't sell. If anyone looks at the insiders, as a matter of fact just a week ago I bought another 50,000 shares at 12 cents. I believe in the deal and that's why you see other CEOs that don't own a penny and you are wondering, well, are their interests really aligned with the shareholders? And people could say, well, no matter what Mr. Docherty does, he's obviously buying shares so he's aligned with us and that's the way I do it.
CL: Good. I like to invest along with the CEO who is the largest shareholder. You have these two wonderful projects so you can start drilling this year. What's your plan and what kind of timeframe is there for news flow?
TD: Well, I think next week or so, within the next 10 days, we're going to be sending up five graduating student geologists of Dr. Lee Groat who's our qualified person; they're going to map the whole area, take soil samplings, and I understand we're going to start taking rock samples off the porphyry because both Dr. Groat and my chairman Tony [Fogarassy], who are geological experts, are so excited about that area. It's never been looked at in its entirety before because up until recently it's been covered by snow and glaciers. But thanks to Mother Nature and global warming, that's one of the benefits, that you can get to properties that were previously unattainable. So, they're going to go up starting in 10 days and then we're going to follow that up in a couple weeks with induced polarization on the property to see what's underneath the surface. We know we have porphyry, but what else is there?, which is very exciting. When we have that, then we'll follow it up with the drill program, which as you know we've mentioned, we own our own drill now that we bought from a group in Alaska just so that we can control when the drilling program is and not have high costs that go out of control. We make sure that we take care of all those ends so there's no surprises for us. And then when we're finished up there, we'll head down to Colorado and see what we can do there.
CL: So, maybe when in the winter you can move on to Colorado; can that can be drilled for a longer season than BC?
TD: Yes, a much longer season. We're limited in Canada because we're up a mountain, we're limited for really a three, three-and-a-half-month season where I've been told in Colorado where we're situated down there, it's easily a 10-month exploration window for us, so we're not constrained at all. And I should mention, Chen, just for the viewers, that because we are quote-unquote the only tellurium company out there, people that have some interest in tellurium properties are starting to approach us because they're doing their Google searches with tellurium so there are some interesting properties that come our way. They're not on our radar as we speak, but I wouldn't be surprised if something tickles our fancy in a month, two months, three months. So, if we add another property, it might be because it has outstanding tellurium potential. It's not going to take away a lot of our budget, but if we can put it under wraps on a relatively cheap basis, then that's something to look at down the road.
CL: Excellent. Do you have more to add to potentially interest new investors and interested parties?
TD: There's a couple other things that we work on, and unlike a lot of junior companies, there's never any rumors that leak out where people say, “Buy on rumor, sell out news.” That never happens with us, so sometimes you take people by surprise, “Oh, we didn't know that was happening.” There's lots of stuff going on behind the scenes on a number of different fronts that I can't talk about, and when we put out a news release, people don't have to guess, “Well, is this true?” It's 100% true and that's why we wait, just like, for example, we were working on Salmon Gold with Apple and Tiffany and Company, no one knew anything until we announced it four years ago and caught people by surprise. So, there's lots of stuff going behind the scenes that I think has a chance to greatly enhance the value of the company.
CL: Finally, last year First Tellurium stock had a huge run to almost a dollar, and then your stock tends to be moving very violently with any slight news or some interest, so right now seems to be a good time with coming news, you have the drilling, and especially tellurium if the United States government decides to get involved. You're working with government right now.
TD: As a matter of fact, as we speak, my chairman Tony is meeting with the Canadian government representative who seems very interested in critical metals as they made that public, but tellurium was sort of an education process for them as well. As you mentioned, not too many people know but they understand how big it is in solar panels through First Solar and then with the University of British Columbia on this new phenomenal battery, so they're willing to sit down and talk and figure out if we can fit in with them somehow. We'll also see what happens.
And to talk to the stock price, just to let people know who follow charts is that, yeah, we had a great run there, starting in January until the end of February of 2021, and that's because we announced this new lithium-tellurium battery from the University of British Columbia, which is far superior to lithium-ion, and then the stock plummeted. And you can go check the morning that it happened, that was the morning that Russia invaded Ukraine, so all the people that are buying in Europe decided to sell and I don't blame them, but that's the only reason it came down. If there was no invasion, I'm sure we'd be up at 55 or 60 cents or higher, but these things happen and people always think there's something going wrong. Not at all, and just to let people know, I bought I think 40,000 shares at 48 cents on the way up and haven't sold a share since and added a lot more. So, either I know something's good or I'm a dummy and hopefully it's the former not the latter.
CL: Thank you. Good luck. Always nice to have the CEO as a strong shareholder.
TD: Anytime, Chen. Thank you.
Note: this interview was posted on July 8 and can be viewed here.
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- First Tellurium has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of First Tellurium.
- Chen Lin: I, or members of my immediate household or family, own securities of: First Tellurium. I determined which companies would be included in this article based on my research and understanding of the sector.
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